The following are the comparative financial statements for three years for Plastic Works Limited. You are required to comment on the firm’s financial condition and indicate the areas which require management’s attention.Table 25.40: Plastic Works Limited Comparative Balance Sheets (Rs) 19X3 19X2 19X1Liabilities and Capital Bank borrowing 30,525 10,175 – Creditors 331,127 147,725 113,980 Accrued expenses 21,510 14,361 20,350 Provision for dividend 20,350 20,350 20,350 Provision for taxes 56,367 88,435 86,111 Total current liabilities 459,879 281,046 240,791 Long-term loan 71,225 Nil Nil Total liabilities 531,104 281,046 240,791 Share capital 407,000 407,000 407,000 Reserves and surplus 80,983 88,826 67,067 Net worth 487,983 495,826 474,067Total Funds 1019,087 776,872 714,858Assets Cash 99,164 35,922 13,930 Debtors 215,356 207,780 211,196 Stock: Raw material 133,577 107,409 98,411 Work in process 47,882 50,179 42,230 Finished goods 266,534 177,788 174,892 Prepaid expenses 17,350 13,726 12,697 Total current assets 779,863 592,804 553,356 19X3 19X2 19X1 Buildings, plant and equipment 229,314 177,047 161,502 Misc. fixed assets 9,910 7,021 – Total non-current assets 239,224 184,068 161,502Total Assets 1,019,087 776,872 714,858Table 25.41: Plastic Works Limited Summarised Profit & Loss Statements for the year ended 31 December (Rs) 19X3 19X2 19X1Sales 1,872,937 1,599,315 1,429,818Cost of goods sold 896,953 767,673 683,597Gross profit 975,984 831,642 746,221 19X3 19X2 19X1Operating expenses 846,059 640,048 545,750Profit before taxes 129,925 191,594 200,471Taxes 56,367 88,435 93,050Net profit 73,558 103,159 107,421Dividends 81,400 81,400 81,400
The following are the comparative financial statements for three years for Plastic Works Limited. You are required to comment on the firm’s financial condition and indicate the areas which require management’s attention.
Table 25.40: Plastic Works Limited
Comparative
19X3 19X2 19X1
Liabilities and Capital
Bank borrowing 30,525 10,175 –
Creditors 331,127 147,725 113,980
Accrued expenses 21,510 14,361 20,350
Provision for dividend 20,350 20,350 20,350
Provision for taxes 56,367 88,435 86,111
Total current liabilities 459,879 281,046 240,791
Long-term loan 71,225 Nil Nil
Total liabilities 531,104 281,046 240,791
Share capital 407,000 407,000 407,000
Reserves and surplus 80,983 88,826 67,067
Net worth 487,983 495,826 474,067
Total Funds 1019,087 776,872 714,858
Assets
Cash 99,164 35,922 13,930
Debtors 215,356 207,780 211,196
Stock:
Raw material 133,577 107,409 98,411
Work in process 47,882 50,179 42,230
Finished goods 266,534 177,788 174,892
Prepaid expenses 17,350 13,726 12,697
Total current assets 779,863 592,804 553,356
19X3 19X2 19X1
Buildings, plant and equipment 229,314 177,047 161,502
Misc. fixed assets 9,910 7,021 –
Total non-current assets 239,224 184,068 161,502
Total Assets 1,019,087 776,872 714,858
Table 25.41: Plastic Works Limited
Summarised Profit & Loss Statements
for the year ended 31 December (Rs)
19X3 19X2 19X1
Sales 1,872,937 1,599,315 1,429,818
Cost of goods sold 896,953 767,673 683,597
Gross profit 975,984 831,642 746,221
19X3 19X2 19X1
Operating expenses 846,059 640,048 545,750
Profit before taxes 129,925 191,594 200,471
Taxes 56,367 88,435 93,050
Net profit 73,558 103,159 107,421
Dividends 81,400 81,400 81,400
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